Coronavirus: Agility and speed required as we rebuild economy

Signs are promising that the worst fears regarding the health consequences of Covid-19 won't be borne out here. Swift measures in New Zealand and Australia – two isolated countries with relatively small populations – appear to be holding back the disease in both countries.

So long as we retain real focus on the border, enhance our testing and tracing activity, and retain careful practices around hand-washing and keeping a distance, we can increasingly turn our attention to addressing the wider consequences of the virus – the huge impact on jobs, livelihoods and general wellbeing.

The key to that is getting out of lockdown as quickly as we safely can.

We should not be bold and swift going into lockdown, but then ultra-cautious and hesitant coming out.

Every day that the talents and energies of Kiwis are not being put to use, every day that most hospital beds are empty and normal health and education activities are not carried out, we are paying a heavy price.

This requires agility from the Government; a willingness to move and change quickly.

The critical thing this coming week is for the Government to clarify what it sees are the steps to progressively reopen the economy after the lockdown. Is it all online commerce first with home deliveries, all elements of the supply chain feeding essential services, construction and general medical work? Then what's next? Everything that doesn't involve large crowds, while retaining restrictions on borders?

These steps need to be announced as soon as possible.

We need absolute clarity about what's in and what's out at each step, and how social distancing in the workplace will work in practice. Confusion and gross unfairness between businesses may have been forgiven as we raced headlong into lockdown at the start of the crisis, but it won't be forgiven as we come out.

If the level four, three and two system that we've created is unnecessarily clunky and rigid, we should abandon or adapt it, so that new segments of everyday life can be opened up as quickly as possible without having to go through a great bureaucratic chain of command to shift from level three to two.

Throughout, businesses would benefit from as much signalling of the changes as possible to get ready.

The prime minister's suggestion on Thursday that she'll announce possible moves on steps out of lockdown on April 20 or 21, one or two days before it is due to lift, is totally impractical and will needlessly hold us back.

Surely, we can have an idea of what more we can safely do by next week, well in advance of the end of the lockdown.

Of course there is a risk that if we open up too soon we may see infection rates go up. The response to that is extensive testing, tracing and isolation. But as we can all see, the alternative of staying in lockdown longer than necessary is far from risk free.

The economy, meantime, when it reopens will be recovering from a dramatic shock. Some firms will see pent-up demand from customers and recover quickly.

For many, however, it will be a long-slow grind as wary New Zealanders are careful with their spending, and as businesses seek to rebuild their balance-sheets.

There will be a need for some short-term stimulus once we've opened up, to help kick-start the economy. An immediate tax rebate or a short-term, time-limited tax cut aimed at lower and middle-income earners might be the best way to do that.

Most businesses have the cash from the wage subsidy already; but some sectors will need more to survive if the opening up is slow. The Government-backed loan scheme will have to be tweaked if it is to make a difference, and some Government direction on commercial leases, long promised, will need to be delivered.

In the medium term, we need pro-growth policies to encourage investment. This is not the time for the state to take over the economy or for a committee of Wellington officials to decide where investment should flow.

No virus can change the formula for success. Most growth, jobs and opportunities will come from people and their businesses taking a risk to invest in rebuilding and expanding their enterprises, hiring new people, starting new ventures, buying new machines.

They're more likely to make those investments if they feel confident in the direction taken by the Government – that it won't regulate them to death, over-tax them or keep changing the rules.

The Government should hold off on the countless new costs and rules it was planning to impose on the productive sector in the next year or so, so that they can catch their breath and get started.

Meantime, it's a good time to invest quality infrastructure, the innovation and R&D sector, and in the skills needed for the modern workplace.

There's no reason our country can't return to prosperity soon if we continue to apply agility and urgency to the great task of rebuilding our economy.